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ARM Holdings will soon release a new processor design that can run virtualization software, a development that could help expand the use of ARM-based chips in low-powered servers, the company announced Monday.

The virtualization capabilities will be introduced with the next version of ARM's Cortex A processor, code-named Eagle, which is "very, very close" to being released, said David Brash, a member of ARM's architecture group, in a presentation at the Hot Chips conference at Stanford, Calif.

Several companies are already developing hypervisor software for the new chip design, including VMware, the market leader in server virtualization, and other vendors that make hypervisors for mobile and embedded use, according to a slide that Brash showed during his presentation.

Virtualization allows software to run separately from its underlying hardware so that several operating environments can be run simultaneously on one computer, each in its own virtual machine. The technology has existed for a long time on mainframes and recently became popular for consolidating workloads on x86-based servers.

Virtualization could help developers bring their applications to a wide variety of phones more quickly, because they would no longer have to port them to each hardware device. Instead, the applications could run in a virtual machine separate from the underlying hardware.

Virtualization will also allow users to install multiple operating systems on a single phone. A user could have one OS environment for work and one for personal use, for example. VMware has already said it is developing virtualization software for mobile phones.

But ARM also has ambitions in the server market, where reducing power consumption has become a big priority. Allowing hypervisors to run on its chips could help it break into that market. "We think there's going to be a place for low-power servers with the ARM architecture," Brash said.

There are challenges to using ARM chips in servers, however. Most server software is written for x86- and RISC-type processors, so software makers would have to port their software to ARM's designs. And ARM processors are less powerful than server chips from vendors like IBM and Intel.

The new ARM design will support both full virtualization and a more limited form of virtualization called paravirtualization, Brash said. The other partners he named were Enea, Green Hills Software, Mentor Graphics, Open Kernel Labs, and VirtualLogix.